Embracing Reality

On the CEP blog last week and this week, CEP President Phil Buchanan is discussing, in a series of eight posts, recent critiques of large, staffed foundations and assertions that recently-established, “lean” foundations are paving a promising new path without being saddled by “bureaucracy.” The following is the eighth and final post in the series.

Over the past two weeks, I have argued in a series of blog posts that big foundations often need staff to get things done. I’ve also taken issue with the fetishization of the “new donors,” and have suggested that, over time, they may end up looking a lot like the “old” ones that have been dismissed as “dinosaurs.”

I’ve made four basic points:

  • First, it’s not actually clear that the new foundations being heralded by David Callahan of Inside Philanthropy for their slim staffs will be so thin five or 10 years from now — or even that they’re that slender now!
  • Second, the small size and great diversity of nonprofits often requires larger foundations to have enough staff to be able to interact with many different entities to be knowledgeable enough to make good decisions about who to fund.
  • Third, our data and analysis (of tens of thousands of surveys of grantees of hundreds of foundations) shows the benefit — to grantees — when foundations have sufficient numbers of staff for the goals and operating strategies they’ve chosen.
  • Fourth, it’s not just about numbers — the quality of staff and of staff culture matters, because what happens inside foundations’ walls ripples outside those walls.

My intent has not been to argue that foundations — new and old, big and small — can’t do better in terms of their effectiveness and impact. Of course they can! And they should! And the organization I lead is dedicated to helping them in that effort.

Indeed, in the process of doing our work, we have often been critical of foundations — highlighting areas of disconnect between rhetoric and practice in areas such as performance assessment and strategy. But we have tried to do so in a way that is informed by data.

Fact is, there are, today, many highly effective foundations (both newer and old) — and the results they achieve can be astounding. Look, for example, at the role that the Gill Foundation and Haas, Jr. Fund played in the marriage equality effort. Their efforts to be effective required clear goals, coherent strategies (shared across many actors), disciplined implementation, and good performance indicators. Putting all the elements of effectiveness together doesn’t guarantee results, but it’s probably true that you won’t get results without these pieces being in place.

And that usually requires the time, smarts, skills, and energy of staff. Really good staff.

(Disclosure: Gill and Haas Jr. Fund are clients of CEP’s and Haas has from time to time provided modest grant support to CEP.)

There are, of course, also foundations that have not been effective enough and some that rather too closely resemble Sean Parker’s characterization in the Wall Street Journal  of bloated bureaucracies staffed by individuals more interested in self-preservation than impact. But to suggest, as Callahan repeatedly has, that there is some kind of negative correlation between numbers of staff and effectiveness and impact is to ignore the available evidence.

And, of course, it’s not simply about numbers — it’s about the quality of staff and the culture in which they work.

I felt compelled to write these posts in part because I fear that the arguments of Callahan and Parker play right into the hands of foundation boards that too often push for low administrative costs without sufficient understanding of what staff can help them achieve. As others have noted, it’s “the Overhead Myth,” foundation-style. The fault is not always the boards’ alone; too often, foundation staff fail to compellingly explain their model and approach — why staff are needed to make progress toward important goals or to provide data needed to help gauge effectiveness.

Look, I am glad that the new donors of today are often impatient for results. That’s largely a good — yet not necessarily new — thing. I am also glad that many are looking critically at the available options for pursuing impact, rather than simply defaulting to what others have done in their philanthropic efforts. (Although I do wish more would seek, as Cari Tuna of Good Ventures has, to learn from history — something I recently discussed in another blog post.)

But the reality is, these donors will need sufficient numbers of excellent staff to get the work done.

To pretend otherwise is pure fantasy.

Find all posts in the series here.

Phil Buchanan is president of CEP. Follow him on Twitter at @philCEP.

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